I say they need to hire Steven Spielberg as an architect. Or maybe M. Night Shyamalan so he can give a twist to the whole thing, like when you get to the top floor, you find out that you're actually 100 floors underground.

Time Warner Center has been a very successful mixed-used development for Related. Back when they were going to build on the Madison Square Garden site, its the formula they were using then, only on a "much grander sale". It's similarly what they plan to do here, only now there will build a "city" to go with it.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Time Warner Center has been a very successful mixed-used development for Related. Back when they were going to build on the Madison Square Garden site, its the formula they were using then, only on a "much grander sale". It's similarly what they plan to do here, only now there will build a "city" to go with it.

Tishman Construction has awarded a $2-million contract to Waldorf Holding LLC to demolish the Metals Purchasing Building, located at 30th Street and 10th Avenue in New York City.

The demolition of the one-story, 60,000-sq-ft building is expected to be completed by May 2011.

This is the first step of site preparation for Hudson Yards, a multibillion-dollar mixed-use master- planned community that will eventually include 13 million sq ft of commercial and residential space. The Related Cos. and Oxford Properties are the general partner developers of the 26-acre Hudson Yards development.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Hudson Yards development tries to tempt a tenant
Related's finally ready to build fab new hood. If only it had an occupant.

By Theresa Agovino
January 16, 2011

Quote:

It's been an incredibly hectic three years for The Related Companies as it laid the groundwork for developing the giant Hudson rail yards project. The company announced and then amended the timing of its deal to lease the 26-acre site, scrambled to find a new financial partner after Goldman Sachs dropped out, and won a crucial rezoning for a portion of the parcel.

“All of the hairiness of this transaction has been removed,” said Related Hudson Yards President Jay Cross.

With that accomplished, Mr. Cross is calling 2011 “the year of the tenant.” So he hopes.

Amid the still-fragile economic recovery, Related needs to find a company willing to commit to occupying at least 600,000 square feet of office space. Only then can Related attract the needed financing and start building what will be a completely new neighborhood.

To land its key tenant, the developer is offering either to construct a building and sell it to that company at cost, or to provide a big break on the rent. In either case, Related is promising a state-of-the-art tower that will rise on acres of open space, bordered by the High Line and the Hudson River. Other perks will include a 750,000-square-foot glass mall topped with a great room: an enclosed dining and socializing piazza featuring an 80-foot ceiling and great river views.

The entire 12-million-square-foot, $15 billion project is expected to take as long as 15 years to finish. When the project is completed, a platform constructed over the working rail yards will be home to a new community boasting three office buildings, nine residential towers with a total of 5,000 apartments, a mall, a school, a cultural center and 12 acres of open space. The parcel runs from 10th to 12th avenues and from West 30th to West 33rd streets.

Enticing tenants will be enormously tough, experts say. Massive projects have a history of taking longer than expected, and in the meantime, companies seeking large swaths of space have other options, including two towers rising at ground zero. Vornado Realty Trust has approval to construct a tower on Seventh Avenue across from Penn Station, while Boston Properties is ready to restart its development at West 55th Street as soon as it finds a tenant, sources say.

Roping a maverick

“Hudson Yards is not yet built, and it's in an untested area, so you are going to need a real maverick to go there,” said Richard J. Brown, co-chair of law firm Herrick Feinstein's commercial leasing practice group. “A lot of companies don't like to be first.”

Ms. Tighe insists that the project will succeed, given that much of the city's space is old and that there's little in the pipeline. She notes that a mere 32 buildings, with 27.6 million square feet in all—less than 10% of the city's total—were built after 1990. And they have an availability rate of just 10.7%, compared with the city's average of 12.6%.

Other pluses for the project include the improving economy, the stunning rise of the High Line and surrounding neighborhoods as major destinations, and the extension of the No. 7 subway line to the site's West 33rd Street border.

The strengthening economy will cut both ways for Related. Once certain real estate benchmarks are hit, Related must officially close its 99-year lease deal with the Metropolitan Transportation Authority and hand over $9.2 million immediately. The close of the deal starts the clock for rent and other payments, which Related will eventually have to make, whether it has tenants or not.

For help, Related partnered with Oxford Properties, an arm of one of Canada's largest pension funds, to help finance and market the project.

“There isn't a site anywhere else like Hudson Yards,” said Blake Hutcheson, Oxford's chief executive, adding that the firm is bullish on New York because of its position in the global financial market.

Modest beginnings

The first tower will not open its doors until 2015 at the earliest. Even then, Related will not exactly strike it rich, given the company's plans to sell the building at cost or charge only enough rent to cover construction costs—a sum that Mr. Cross estimates at about $70 a square foot. For built-to-suit, green space, that represents a real bargain, he says. What's more, tax incentives can save tenants $6 per square foot.

Savings are only part of the draw. After completion of the No. 7 extension, slated for December 2013, it will take less than 10 minutes to reach Grand Central Terminal from Hudson Yards. Penn Station and the Port Authority Bus Terminal are even closer.

The logistics are only part of the pitch. Mr. Cross is convinced that tenants will be drawn by the open space, the cultural center and the mall—which will be twice the size of the retail portion of another Related development, the Time Warner Center. What's more, a short walk on the High Line will take people to some of the city's most popular spots.

“The hardest part of this is convincing people [the project] is for real,” said Mr. Cross.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

From that model, and the description of the first tower to be built, it looks like the 2 tallest commercial towers are possibly designed, while the rest look like massing model placeholders.

Quote:

Related is focusing its planning on starting a 1.4 million-square-foot building on the southeast corner of the rail yards
that would have up to 1 million square feet of office space, topped with 25 floors of apartments, according to Mr. Cross.

This 800-foot-plus tower would sit on firm ground, while the rest of the site requires an expensive roof to first be built over the tracks.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

A Crain's report yesterday spelled out the challenges Related Cos. faces in getting its massive Hudson Yards project off the ground -- including the possibility that profits could be long in coming even if everything falls into place for CEO Stephen Ross, who built Time Warner Center.

But the key word, which appeared but once among the article's 700-odd words, was "Coach" -- the leatherwear maker that's considering making the rail yards site its headquarters and is now in talks to take up to 600,000 square feet of offices.

Those talks were first reported in this column last Nov. 30. We wrote that the two sides were trading proposals and options for each of the site's three planned towers.

There's a veil of secrecy over negotiations. But if a deal were to be struck with Coach, we'll predict it would get the first tower built at one corner of Hudson Yards or another -- obstacles be damned.

While financial firms could have qualms about going west of 10th Avenue, Coach has long been based on far-west 33rd and 34th streets, and a switch to a new tower home would require little more than a stroll down the block.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Leasing activity surged 44% to 24.2 million square feet, and the availability rate dropped to 12.6% from 14.2% in 2009. Overall asking rents slipped slightly to $48.32 a square foot, although they were trending higher at the end of the year. Brokers noted some landlords in midtown were starting to raise rents and cut back on concession packages such as free rent.

All the leasing combined with a lack of new development means very large tenants have few options in midtown. There are only eight blocks of space currently on the market with more than 250,000 square feet. That could push tenants to consider looking at the proposed Hudson Yards development or downtown, said Patrick Murphy, a CBRE vice chairman. He added that Boston Properties is having discussion with some tenants that could push the developer to resume construction of its office tower on West 55th Street, which was mothballed during the recession.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

...Futterman led a discussion—well attended in spite of a dismal weather forecast—in which panelists weighed in on the retail market here from a variety of perspectives. L. Jay Cross, president of Related Oxford Hudson Yards, noted that the retail component of the Far West Side mega-project stood out largely on the basis of its sheer scale. Hudson Yards’ retail alone will be twice the size of the 2.8-million-square-foot Time Warner Center complex, he said.

“The scale sometimes is very daunting, but in the end I think it will be game-changing,” said Cross. It is also likely to draw upon a built-in customer base: in addition to shoppers gravitating from Hudson Yards’ office towers, Cross said the Far West Side is Manhattan’s fastest-growing residential neighborhood but, aside from the Meatpacking District, it is underserved by retail.

If leasing and foot traffic have come back strong, and rents have begun to tick back up as well, then the return of lending is still a ways off. Cross noted that Related Cos.’ partnership with Canada-based Oxford Properties Group, the real estate investment and development arm of the OMERS Worldwide group, gives Hudson Yards a certain amount of pull with lenders that might not be achievable by pure developers. As to whether that will translate into construction financing, Cross said, “We don’t know yet.”

Richard Wagman, managing partner of Madison Capital, noted that compared to a year ago, lenders have been coming back “very quickly,” at least in the sweet spot of loans ranging from $25 million to $100 million. Bragg added, though, that underwriting remains very conservative. “We think that’s a great thing,” she added.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

February 10, 2011 1:34 PM
Owner aims to lease 3.5M SF at Hudson Yards
The Related Cos.' Chief Executive Stephen Ross says he expects to lease about a quarter of the 12 million-square-foot Hudson Yards development by the end of the year.
Share Print Email Comment By Jeremy Smerd Stephen Ross is bullish on New York real estate, particularly his own.

The chief executive of The Related Cos. said Wednesday night that he expects to lease 3.5 million square feet of commercial office space by the end of the year at his 26-acre Hudson Yards development on the West Side of Manhattan.

Speaking at a real estate forum at Columbia University, Mr. Ross said Related is actively negotiating with several large corporations that he hopes will become anchor tenants at the site. He declined to name the companies and their industries.

"I'm very encouraged by the interest we're getting," Mr. Ross said.

The 12 million-square-foot, $15 billion project could take 15 years to finish. And Mr. Ross—a part owner of the Miami Dolphins—said no deals have yet been signed.

He joked that his predictions could go the way of his Super Bowl forecast from months ago. "I'm the guy who picked Miami to win the Super Bowl," he said. But he added that with the area's aging building stock, companies are eager to move into gleaming office towers in a waterfront area that will have easy access to the extended No. 7 train at the site's West 33rd Street border.

"I'm very optimistic," Mr. Ross said. "It's a bright sign for the future."

The first building is not expected to open until 2015, at the earliest.

Deputy Mayor for Economic Development Robert Steel, who also spoke at the forum, said Hudson Yards development would be the "last frontier" of class A office space in Manhattan after the redevelopment of lower Manhattan. Mr. Steel said the development, which he noted would provide up to four times the amount of office space as Rockefeller Center, represented a major achievement for the Bloomberg administration, which had championed the redevelopment of the state-owned property since the mayor's first term.

"This will be a legacy project that puts things into place for our administration," Mr. Steel said.

Luxury accessories company Coach is among the companies that have been reported to be interested in moving to Hudson Yards.

The Related Cos.' Chief Executive Stephen Ross says he expects to lease about a quarter of the 12 million-square-foot Hudson Yards development by the end of the year.

The chief executive of The Related Cos. said Wednesday night that he expects to lease 3.5 million square feet of commercial office space by the end of the year at his 26-acre Hudson Yards development on the West Side of Manhattan.

Speaking at a real estate forum at Columbia University, Mr. Ross said Related is actively negotiating with several large corporations that he hopes will become anchor tenants at the site. He declined to name the companies and their industries.

"I'm very encouraged by the interest we're getting," Mr. Ross said.

So am I. Great news, as things continue to pick up again around the City.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.

Jason Andrew for The Wall Street Journal
The West Side rail yards, above, is the site of planned tower by Related Cos.Pessimistic? Not Stephen Ross.

In the midst of a slow recovery of Manhattan office rents, Ross — the billionaire chairman of the Related Cos. and one of the city’s most active developers — predicted Wednesday night that he would lure major new office tenants to the yet-to-be-developed West Side rail yards later this year.

“I think we’ll sign about three-and-a-half million square feet of space this year,” Ross said, speaking at a forum hosted by Columbia University’s Graduate School of Architecture, Planning and Preservation.

Development rights above the rail yards, a 26-acre Long Island Rail Road storage site by the base of the Javits Center, are controlled by Related. At the market’s crest, the property was seen as the next frontier for Manhattan office space. But since the financial crisis banks and other major companies all scaled back future expansion plans, making development in an unproven area with extensive infrastructure costs far from inevitable in the near term.

Asked later about his optimistic predictions, Ross said his firm is “negotiating with several tenants” and argued that momentum would pick up after a few signed on. “It’s always the first mover that’s the most difficult,” he said. “But I think I’m very encouraged by the interest.”

Related, which developed the Time Warner Center, has been pressing ahead with preparations for the site. The wall around the yards has already been shrouded with a giant banners advertising the future development, and the company is already actively marketing the site to tenants.

Related’s pitch is that the site offers a cheap price –- the first tenants are being offered their space at the cost of building, while Related would hope to make money from the luxury apartments on the upper floors –- and the ability to create a new, park-lined community on the less-congested far West Side. Now far from trains, the area is slated to have a new station for the No. 7 line by the end of 2013.

Of course, 3.5 million square feet (nearly one-and-a-half Empire State Buildings) is by no means a trivial figure when it comes to leasing. Many observers in the real-estate industry feel it’s an uphill fight for Related to even win a tenant of 1 million square feet this year, given the relatively sluggish economy.

New buildings tend to be particularly expensive and only appeal to certain tenants. Within the past year, the other major new office buildings in town– the three buildings planned or under construction at the World Trade Center — have only received a tentative commitment from one: Conde Nast, for about 1 million square feet. Those buildings can afford to offer significantly lower rents to tenants than those on the West Side due to hundreds of millions of dollars in government assistance, although the rail yards buildings also benefit from some tax breaks.

Speaking after the talk, Ross, who owns the Miami Dolphins, acknowledged his leasing target might not come easy. “I’m the same guy who predicted the super bowl for Miami,” he said.

Related’s pitch is that the site offers a cheap price –- the first tenants are being offered their space at the cost of building, while Related would hope to make money from the luxury apartments on the upper floors

Won't be long before he releases the official rendering.

__________________NEW YORK. World's capital.

“Office buildings are our factories – whether for tech, creative or traditional industries we must continue to grow our modern factories to create new jobs,” said United States Senator Chuck Schumer.